Written Commentary
ADM Reports Second Quarter 2026 Results
August 4, 2026
Arabian Peninsula and Ukraine attacks continue to pressure energy prices, dampen risk appetite, and likely to detract from a busier run of statistics: China and German Trade, Japan Wages and final Q2 GDP, UK BRC Retail Sales, Australia confidence surveys; BoE MPC testimony, US NFIB survey and NY Fed Inflation expectations ahead.
- China: familiar picture of strong external demand for AI-related tech, green technology, autos; imports mixed, rise in crude imports primarily a function of robust refined petroleum exports.
- Japan: stronger than expected wage growth, jump in services optimism reinforce case of BoJ rate hike next week.
- USA: rising energy prices and setback in labour demand indicators likely to weigh on NFIB survey after July jump, may also prompt rise in NY Fed Inflation Expectations.
EVENTS PREVIEW
A relatively busy run of data and events may struggle to contend for attention with escalating attacks in the Arabian Peninsula, continued attacks in the Ukraine-Russia conflict, the aftermath of the Sachsen-Anhalt state election and the ongoing US/Canada trade war, along with an increasingly sharp unwind of JPY carry trades as a September BoJ rate hike now looks inevitable. There are China and German Trade data, Japan’s wages and revised Q2 GDP and UK BRC Retail Sales to digest, while ahead lie US NFIB Small Business Optimism and NY Fed Inflation Expectations, along with testimony from various BoE MPC members.
Japan Labour Cash Earnings
Japan’s Labour Cash Earnings showed all-round strength, with headline smashing expectations at 4.7% y/y vs. forecast 3.8%, Real Earnings up 2.4% y/y vs. expected 1.8%, and base pay up 4.1%, which, along with a modest upward revision to GDP to 1.4% SAAR, and an expected jump in the Economy Watchers (services) Outlook to 48.3 vs. prior 45.8, reinforce the case for a rate hike next week.
China Trade data
China’s Trade data were a tad lower than forecast, but continue to point to strong external demand, with high-tech exports up 42.9%, within which Semiconductor exports doubled in value terms but rose only 4.1% y/y in volume terms, while, by contrast, auto exports were up more than 50% in volume and value terms, while green technology exports also remain very robust, above all to SE Asia. Given China’s continued pivotal role in oil and refined products, a second monthly rise in Crude imports was notable but still leaves overall imports down 14.6% y/y, and was clearly paced by a 29% m/m rise in refined product exports, even if these remain down -9.6% y/y.
The overarching assessment of China’s economy remains the same: domestic demand remains weak on a combination of relatively tight fiscal policy, the ongoing drag from the property sector and weak wage growth, which continues to be offset by robust external demand.
UK BRC Retail Sales
UK BRC Retail Sales slowed to just 0.5% y/y, with Food sales easing to 2.6% y/y from 3.8%, and non-Food Sales contracting modestly y/y, with large ticket items such as furniture showing particular weakness, doubtless prompted by the rebound in road fuel prices.
USA
After posting a much stronger than expected rise in July, NFIB Small Business Optimism on the back of a broad-based rise in Employment indicators (hiring, wages) and economic optimism, August’s survey is expected to drop back to 99.3 from 99.8, with those same labour indicators easing, and higher energy prices also likely to weigh.
NY Fed Inflation Expectations are expected to remain steady at 3.6%, with little follow through in recent months seen after the March/April jump from 3.0%, though the recent rise in gasoline prices impart some upside risks for today’s report. The focus remains on Friday’s likely pivotal CPI data ahead of next week’s FOMC meeting.
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This material is provided for information purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any financial instrument. The views expressed reflect market conditions and publicly available information as of the date of writing and may change without notice. No representation or warranty is made as to the accuracy or completeness of the information. Past performance is not indicative of future results. Readers should consider their own circumstances and, where appropriate, seek independent financial advice.
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